Trickle Downers

The Prospect's ongoing exposé of the folly, dysfunctions, and sheer idiocy of feed-the-rich economic policies.

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

AP Photo/Lynne Sladky Marleine Bastien marches in support of raising the minimum wage to $15 an hour in Miami trickle-downers_35.jpg W ith Democrats looking primed to retake the House, there could be a new—and rare—opportunity to rethink labor laws in the next session of Congress. Numerous policy proposals are already making the rounds, but as progressive Democrats shop around for new labor reforms, where will they turn? Last week, the Economic Policy Institute (EPI) released a 15-point policy agenda to reverse the decades-long erosion of workers’ rights in the U.S. Celine McNicholas, director of labor law and policy at EPI and one of the coauthors of the agenda, says that instead of the “magic bullet” reform that lawmakers might be searching for, there is no quick-fix solution. Getting decent wages back into the pockets of workers and giving workers more power at the bargaining table will take a comprehensive reform package, she says. Workers, she explains, suffer from a “systemic...

(Shutterstock) trickle-downers.jpg A lack of federal oversight has led to flagrant abuses of international students who come to the United States to care for children for low pay, according to “Shortchanged,” a report released this week. Now, immigrant advocacy groups are pressuring for change. Au pairs, most of whom are women, are each charged as much as $2,500 to participate in what placement agencies and the State Department describe as a “cultural exchange” program for young people looking to practice their English and learn about American culture. Under the J-1 visa program, au pairs are placed in a home by a sponsor company and are tasked with caring for the host family's children, much like a live-in nanny. Unlike live-in nannies, however, au pairs have no guaranteed sick days or federal holidays. They earn a flat wage of $4.35 an hour after sponsor agencies deduct room and board from their pay, which lands them at $195.75 a week for 45 hours of work. The au pair program has...

(AP Photo/Andrew Harnik) White House Press Secretary Sarah Huckabee Sanders steps away from the podium following the daily press briefing at the White House on August 15, 2018. T his week, White House Press Secretary Sarah Huckabee Sanders touted false unemployment statistics for black workers—in order to defend President Trump against charges of racism. Sanders told reporters at a press briefing, "When President Obama left after eight years in office—eight years in office—he had only created 195,000 jobs for African Americans. President Trump in his first year and a half has already tripled what President Obama did in eight years." This was, of course, incorrect. The Council of Economic Advisors tweeted out corrected information and took responsibility for the error. The truth is that, over the eight years that Obama was president, about three million jobs were created for black workers. Sanders then apologized in a tweet, while adding she had “no apologies for the 700,000 jobs for...

The biennial Gallup poll on Americans’ sentiments toward capitalism and socialism came out this week, and the numbers tell us a lot, particularly about today’s Democrats. As in the 2016 poll, the share of Democrats who have a favorable view of socialism remains both high and essentially unchanged: 58 percent two years ago, 57 percent today.

In this year’s poll, however, for the first time the share of Democrats who view socialism favorably has taken a non-trivial lead over the share who feel the same way about capitalism. Two years ago, 56 percent of Democrats had a positive view of capitalism, essentially tying it with socialism (however much that meant that some Democrats had a positive view of both, and, for all we know, a positive view of a whole lot of things). This year, by contrast, the share of Democrats viewing capitalism positively tumbled to 47 percent—a full ten points beneath the share looking kindly on socialism.

It’s easy to read too much into these numbers (after all, yesterday’s poll showed that 16 percent of Republicans had a positive view of socialism, though this finding, like much of quantum mechanics, runs counter to reality as humans have experienced it). When many Democrats hear the word “socialism,” they think of such popular social democratic programs as Social Security and Medicare, or the single-payer systems and free public universities that exist in Western Europe. When many Republicans hear the word “socialism,” they think of Joseph Stalin.

That said, it’s not hard to see why even minimally sentient beings would be increasingly wary about capitalism, most certainly as it’s currently practiced in the United States. Just yesterday, as Gallup was releasing its data, the Financial Times produced its own analysis of profits, profit margins, and wages in the United States. With 90 percent of the companies in the S&P 500 now having filed their second-quarter reports, profits have risen by 25 percent over the same period last year, and profit margins—how much companies profit from their gross revenues—have hit 11.8 percent, which the FT says is “the highest level since financial information provider FactSet began recording the data in 2008.”

How very nice. Of course, as corporations rake in more profit from their sales, the share of those sales going to wages likely declines—and indeed, that’s exactly what’s happened. That partly explains why real wages have actually gone down over the past year when the rate of inflation (which by historic standards is still pretty low) is taken into account.

So—record-high profit margins, with record amounts then being shoveled to major shareholders through all-time-high share buybacks, while wages stubbornly sag despite low unemployment levels. Americans—Democratic Americans in particular—likely aren’t able to quote you the numbers, but they certainly sense that big money is being generated, and most Americans aren’t getting it.

No wonder Democrats are more and more dubious about capitalism. They should be.

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

(AP Photo/Matt Rourke) Trump on August 2, 2018, at a rally in Wilkes Barre, Pennsylvania trickle-downers.jpg W hen Trump’s not blaming foreigners for everything that ails America, he’s blaming regulations. Last week, he even blamed regulations for the wildfires now ravaging California. They’re “made so much worse,” he tweeted , “by the bad environmental laws which aren’t allowing massive amount[s] of readily available water to be properly utilized.” I have news for Trump. California’s tough environmental laws are among America’s (and the world’s) last bulwarks against climate change. And it’s climate change—not regulation—that’s wreaking havoc across California as well as much of the rest of the world. Oh, and Californians are using water very carefully. Yet Trump is pushing in the opposite direction. He’s now proposing to let cars pollute more and to strip California of its right to set higher air-quality rules . It’s not just the environment. Trump is also gutting regulations that...